A private,not-for-profit hospital received a contribution of $40,000 on June 15,2008.The donor restricted the contribution to funding research activities currently being performed by the hospital.For the year ended December 31,2008,the hospital spent $30,000 of the contribution on research activities.The hospital expended the remaining $10,000 on research activities in January of 2009.
-Refer to the above information.On the statement of operations prepared for the year ended December 31,2008,the events described would:

Question

Quizplus · Accepted Answer

The contribution was restricted for research activities, so it cannot be considered as part of operating income. Therefore, the expenditure of $30,000 on research activities would be included as an expense in the statement of operations, but it would not affect operating income.

A Private,not-For-Profit Hospital Received a Contribution of $40,000 on June